West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $69.70 in Wednesday’s early Asian session. The price has declined, edging lower due to renewed concerns about Chinese demand.
Impact of Chinese Data
Chinese economic data, especially the disappointing Retail Sales, has stoked concerns. As China is the world’s largest oil importer, weakness in consumer spending there has worried investors. Robert Yawger, director of the energy futures division at Mizuho Securities USA, noted that the bearish momentum from the China data dashed speculators’ hopes of breaking out of the two-month range upwards.
Fed’s Policy Meeting
Oil traders are also awaiting the Fed’s final policy meeting of the year on Wednesday. The market has already priced in a 25 basis points (bps) interest rate cut. But the focus will be on the Fed’s forward guidance for rate policy in 2025 and 2026. If the Fed shows signs of a less aggressive easing cycle, it could boost the Greenback and pull the USD-denominated WTI price lower.
US Crude Inventories
A decline in US crude inventories last week might help limit WTI’s losses. The US American Petroleum Institute (API) weekly report showed that crude oil stockpiles in the US for the week ending December 13 fell by 4.7 million barrels. This is compared to a rise of 499,000 barrels in the previous week. The market consensus estimated a decrease of 1.85 million barrels.
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